Case Name :      Sanlu Group and the Tainted Milk Crisis

Authors :           Shih-Fen Chen, Francis Sun

Source :             Ivey Publishing

Case ID :            909M77

Discipline :        General Management

Case Length :    27 pages

Solution Sample availability : YES

Plagiarism : NO (100% Original work)

In late summer of 2008, a tainted milk scandal unfolded in China and shocked the world. Lethally high levels of melamine were detected in infant formula being sold on the market. Sanlu Group Inc. (Sanlu), the core firm in the scandal, had manufactured a product containing melamine that was 5,125 times higher than the European Union (EU) safety units. The scandal swept through the Chinese dairy industry and all over the world where Chinese dairy products were recalled and banned. By December 2008, the official records indicated over 290,000 infants were sickened, 51,900 were hospitalized, and 11 deaths were suspected and three confirmed. Two managers of Sanlu’s raw milk suppliers were sentenced to death and four of Sanlu’s executive team (including the chief executive officer and chairwoman) were sentenced to varying jail terms. By analyzing the lead-up and background to the scandal, the global reactions to the crisis, the Chinese political climate and the resulting social and cultural transformations, can it be determined what could – and should – be done to prevent similar incidents of food and product safety issues in the future?